Crippled FL Nuke Plant Decision Being Delayed

A lawyer for Progress Energy Florida said Tuesday that a decision on whether to repair or shut down a crippled nuclear power plant is being delayed, which could trigger a $100 million customer refund.

A prior settlement between Progress Energy and consumer advocates calls for a refund if repairs don't begin at the Crystal River plant by the end of the year. The reactor has been down since late 2009 when its concrete containment building cracked during a maintenance and upgrade project.

Officials say fixing the plant would likely take several years with cost estimates ranging from $1.5 billion to $3.5 billion.

"It's technically possible that construction could commence (before the end of the year), but it's unlikely," Progress Energy lawyer John Burnett said during a status conference with a state regulator.

Burnett told Public Service Commissioner Eduardo Balbis, prehearing officer for the five-member regulatory commission, that utility officials now expect to decide by next summer whether to go ahead with repairs or shutter the plant.

If a decision is made to fix it, the company plans to ask the commission to let it pass on to customers any costs not covered by still-unresolved insurance claims for repair and replacement energy costs.

If the facility is permanently closed, Progress Energy could replace it with a new plant, probably burning natural gas.

St. Petersburg-based Progress Energy is Florida's second-largest power company, serving more than 1.6 million homes, businesses and other customers in central and north Florida. The Crystal River plant normally produced about 860 megawatts, enough to power 860,000 homes. Progress Energy has had to buy higher-cost replacement power from other utilities.

Balbis held the conference to get an update from the utility and its parent company, Duke Energy, headquartered in Charlotte, N.C. Consumer advocates, including the state's Office of Public Counsel, also participated.

"There have been a lot of events that have occurred that have put twists and turns in the road," said Deputy Public Counsel Charles Rehwinkel, who joined the conference by telephone. "Certainly the pace of things is not what we would have wanted or expected."

Consumer advocates as well as the utility are still reviewing an outside consultant's report. It concluded the company's repair plan is feasible but poses unresolved technical issues.

Burnett said information from four separate company teams examining the report isn't expected to be presented until December to top-level managers, who ultimately will make the decision on the plant's fate.

"A critical component, which is how much (insurance) money might be available to help repair this, continues to be quite elusive," said Jon Moyle, a lawyer for the Florida Industrial Power Users Group.

The company has filed claims with Nuclear Electric Insurance Ltd. for repair costs plus reimbursement for power it must purchase to replace the electricity no longer being produced by the Crystal River plant.

Burnett said negotiations so far have failed to resolve the claims, so the next step will be nonbinding mediation. If that fails, then binding arbitration would follow.

The company's settlement with consumer advocates partly covers replacement power purchases but the commission next week will hold hearings on the remaining amount expected in 2013.

Moyle said he plans to bring up the insurance claim then. He said he'll argue that the company should file two purchased power claims, one each for a pair of cracks that occurred 18 months apart in separate parts of the containment building.

The utility's policy limit is $500 million per event, so it could receive up to a total of $1 billion if the cracks are deemed separate events, Moyle said.

The limit for the repair policy is $2.2 billion.

Progress Energy also is considering construction of a two-reactor nuclear plant in Levy County not far from Crystal River. An independent panel within the federal Nuclear Regulatory Commission has scheduled a hearing Wednesday in Bronson on a challenge to that plant from two environmental groups.